Question
Onproblems 1-8 you must show your work to get credit. P B =Price of Bond P B = $4500 Annual Interest Payment= $95 Yield =
Onproblems 1-8 you must show your work to get credit.
PB =Price of Bond
- PB = $4500
Annual Interest Payment= $95
Yield =
- PB= $1600
Annual Interest Payment = $190
If the bond is resold for $2000 then:
new yield on bond =
- PB = $2400
Annual Interest Payment = $160
Yield=
If the bond is resold for $2800 then:
new yield on bond =
- PB = $4400
Annual Interest Payment = $220
Yield=
If the bond is resold for $3600 then:
new yield on bond =
- PB= $1600
Yield= 18%
If the bond is resold for $2200 then:
new yield on bond =
- Yield= 16%
Annual Interest payment = $160
PB =
- AT&T Stock
P= $18.60
Earnings per share (EPS)=$2.05
Price Earnings Ratio (P/E ratio) =
Rate of return =
- Verizon Stock
P=$45.80
EPS= $3.75
P/E ratio =
Rate of return =
- Based on the rate of return, would you buy AT&T or Verizon ?
- Based only the rate of return, would you buy Verizon ( based on problem # 8) or the following bond?
PB=$360,
Annual Interest Payment = $25
Problems
(9 and 10) 5 points each
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Public Expenditure Decisions In The Urban Community
Authors: Howard G Schaller
1st Edition
1317310985, 9781317310983
